As of November 14, 2023, Treasury yields were as follows: 1-year 5.24% 2-year 4.80% 3-year 4.56% 5-year 4.42% 10-year 4.44% 30-year 4.61% Use these yields to answer the questions below. c. Use the yields above to estimate the two-year forward rate one year from now (t+1r2). d. Use the yields above to estimate the one-year forward rate two years from now (t+2r1). e. Do your estimates in (c) and (d) support your answer in (a)? Explain.
As of November 14, 2023, Treasury yields were as follows:
1-year 5.24%
2-year 4.80%
3-year 4.56%
5-year 4.42%
10-year 4.44%
30-year 4.61%
Use these yields to answer the questions below.
c. Use the yields above to estimate the two-year forward rate one year from now (t+1r2).
d. Use the yields above to estimate the one-year forward rate two years from now (t+2r1).
e. Do your estimates in (c) and (d) support your answer in (a)? Explain.
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